Debt consolidation in Australia: how it works, when it helps, and when it makes things worse
Continues on MyBudget’s official website.
Debt consolidation combines multiple debts into one. It can reduce stress, simplify repayments and lower cost — or it can quietly increase what you pay overall. Which one depends on details most comparisons skip.
MyBudget’s first appointment is free, with no long-term lock-in contracts. Call 1300 300 922.
How consolidation works with MyBudget
1. Book a free appointment. A ten-minute confidential chat so a Money Coach understands your situation.
2. Review your debts and budget. What you owe, your regular expenses, and what you can realistically afford.
3. Explore the options. Consolidation is one path among several, compared rather than assumed.
4. Build a personalised plan. A 12-month budget mapping every bill and repayment.
5. Automate bills and repayments. So due dates are handled.
6. Ongoing support. A Money Coach adjusts the plan as circumstances change.
Which debts can be consolidated
Consolidation applies to unsecured debts — credit cards, personal loans, store cards, buy now pay later accounts and similar. Secured debts such as a mortgage or car loan are tied to an asset and work differently.
When consolidation genuinely helps
- The new rate is meaningfully lower than the weighted average of what you are paying now
- Fees do not erode the interest saving
- The term is not materially longer than your current repayment path
- The behaviour that created the debt has been addressed, so the cleared cards stay clear
When it makes things worse
A longer term raises the total cost. Lowering the monthly repayment by stretching a three-year debt across seven years can increase the total interest substantially, even at a lower rate. The monthly number improves while the real cost gets worse.
Secured consolidation puts assets at risk. Borrowing against your home to clear unsecured debt converts debt that could not take your house into debt that can.
The cards can refill. Consolidation clears balances without changing spending patterns. Some people end up with the consolidation loan and fresh card debt on top.
Qualification is not guaranteed. Applying when you are unlikely to qualify can affect your credit score.
The alternative if borrowing is not right
Where consolidation does not stack up, a structured budget can achieve the same reduction without adding a debt — mapping bills and repayments across twelve months, negotiating with creditors where repayments are unaffordable, and building a buffer so the next surprise does not restart the cycle.
The MyBudget difference
MyBudget looks at your entire financial situation, bringing lending, budgeting and money management into one service. Where borrowing genuinely helps, MyBudget Loans compares products across a panel of over 15 major Australian lenders including NAB, Westpac, ANZ and Pepper Money. Where it does not, the alternative is a plan built from what you already have.
Questions about debt consolidation
How does debt consolidation work with MyBudget?
We review your debts, repayments, expenses and financial goals before explaining the options that may suit you. This could include a debt consolidation loan or, if borrowing isn’t suitable, a personalised debt management plan with creditor support and ongoing money management.
What happens at a free debt consolidation appointment?
We’ll discuss what you owe, your current debt repayments and what is putting pressure on your budget. We’ll then explain the debt consolidation and budgeting options that may suit your situation. Your first appointment is free, with no obligation to proceed and your 12 month budget is yours free to keep.
Can BNPL debts be included in debt consolidation?
Sometimes. Eligible buy now pay later balances may be included in a debt consolidation loan, depending on the lender and your circumstances. MyBudget can review all your BNPL accounts and help create one clear repayment plan, whether consolidation is suitable or not.
How much does debt consolidation with MyBudget cost?
Your first MyBudget appointment is free. If you choose to join, your fee will depend on the complexity of your financial situation and the level of support you need. We’ll explain all costs upfront, and there are no long-term lock-in contracts.
How long does the debt consolidation process take?
The timeframe depends on your debts, financial situation and whether a debt consolidation loan application is required. After reviewing your finances, we’ll explain the next steps and give you a clearer idea of how long the process may take.
What support will I receive after my debt consolidation plan starts?
MyBudget can help manage your bills and debt repayments, show you what is coming over the next 12 months and provide ongoing human support. If your circumstances change, we can help adjust your plan and keep you moving forward.
Important information
This page provides general information only. It does not take your personal circumstances into account and is not personal financial advice. For the scope and licensing of a particular service, check the service provider's current disclosures or contact MyBudget.
Free, independent and confidential financial counselling is available from the National Debt Helpline on 1800 007 007, and ASIC’s MoneySmart website publishes free guidance. MyBudget is not a registered debt agreement administrator; where a Part 9 debt agreement appears suitable, MyBudget can refer you to its sister company MyDebtSolutions, which is a registered administrator.
Lending is arranged through MyBudget Loans, a broker within the MyBudget group operating under the LMG aggregator arrangement. Any estimate is not an offer of finance — approval, rates and terms are subject to the lender’s own assessment.
Call MyBudget on 1300 300 922 for a free, confidential, no-obligation appointment. Your personalised 12-month budget is free and yours to keep.
Get budgeting support
Estimate loan repayments
Use the personal loan calculator to explore how the loan amount, rate and term affect repayments. Compare the total cost, fees and term as well as the regular repayment when considering consolidation.
What is debt consolidation and how does MyBudget help with it?
Debt consolidation combines multiple debts into a single new loan or unified repayment arrangement. MyBudget helps by combining debts with a tailored plan, managed payments and real support, aiming to help you pay off debt sooner, reduce interest and fees, and get relief from creditor calls.
What are the steps in MyBudget's debt consolidation process?
The process involves six steps: 1) Book a free ten-minute confidential appointment with a Money Coach, 2) Review your debts and budget including what you owe, regular expenses, and affordability, 3) Explore your options with consolidation compared against alternatives rather than assumed as the answer, 4) Build a personalised 12-month budget mapping every bill and repayment, 5) Automate bills and repayments so due dates aren't something you track, and 6) Get ongoing support as a Money Coach adjusts the plan when circumstances change.
What types of debt can be consolidated according to MyBudget?
Consolidation applies to unsecured debts — credit cards, personal loans, store cards, buy now pay later accounts and similar. Secured debts such as a mortgage or car loan are tied to an asset and work differently.
Is a debt consolidation loan always cheaper?
No. The page states a consolidation loan is not automatically cheaper. Stretching debt over a longer term lowers the monthly repayment while increasing the total cost.
What risks does the page mention regarding secured debt consolidation?
Secured consolidation — borrowing against your home — puts an asset at risk if you cannot repay.
What happens if someone clears their cards through consolidation but doesn't change spending habits?
A consolidation loan clears the cards without clearing the habit, so some people accumulate fresh debt on the cards they just paid off and end up worse off.
Does applying for a consolidation loan carry any risk if you don't qualify?
Yes. Qualification is not guaranteed, and applying when you are unlikely to qualify can affect your credit score.
What is the MyBudget difference in approaching debt consolidation?
MyBudget looks at your entire financial situation, bringing lending, budgeting and money management into one service. Where borrowing genuinely helps, MyBudget Loans can compare products across a panel of over 15 major Australian lenders. Where it does not, the alternative is a plan that works with what you already have.
Is MyBudget a licensed financial adviser or debt agreement administrator?
For licensing, registration and the scope of advice available from a particular service, check the relevant provider's current disclosures or contact MyBudget directly. This page provides general information only and does not take your personal circumstances into account.
Where can someone get free, independent financial counselling as an alternative to MyBudget?
Free, independent and confidential financial counselling is available from the National Debt Helpline on 1800 007 007.
How can someone get started with MyBudget's debt consolidation service?
You can call 1300 300 922 for a free, confidential, no-obligation appointment. The first appointment is free, with no long-term lock-in contracts.
What are the two main types of debt consolidation loans?
According to the knowledge base, the two main types are secured loans (backed by an asset such as a car or home equity, putting that asset at risk if repayments aren't met) and unsecured loans (no asset required as collateral, but usually carrying higher interest rates, stricter approval rules, and higher monthly repayments due to increased lender risk).